ABSTRACT
This chapter discusses the production technology in the Special economic zones (SEZ) sector is characterised by increasing returns to scale (IRS) generated from positive spillover at the within-industry level. The idea behind formation of SEZs is to promote export-led growth and industrial development in small, open developing economies such as India. However, in a dual and agro-based developing Asian country like India, this process also involves acquisition of agricultural land, which subsequently results in displacement of people attached to the land. The population in the SEZs comprises primarily immigrants from rural and less economically developed areas of China. South Korean export processing zones (EPZ) have been transformed into zones for technology and capital-intensive industries but not as employment-generating industrial zones. In Maharashtra, Maharashtra Industrial Development Corporation (MIDC) has come out with a rehabilitation package which includes assured employment for members of the displaced families and land at concessional rates for them in the developed area.
